Finding the right people to help your company grow to the next level is one of the greatest challenges businesses face today. While most companies have come to know the importance of developing a reliable recruitment process, they’re often not taking the next vital step in analyzing and understanding their methodology.
Without reliable key performance indicators to measure the effectiveness of their talent acquisition strategy, companies have the potential to waste innumerable hours and dollars in their hiring efforts and likely won’t understand where their system is breaking down or how to fix it.
In this article, we’ll discuss the main KPIs you should be measuring to better understand your process and how to adjust accordingly to ensure your recruitment strategy is optimized in attracting and securing top talent.
Time in Process
Often referred to as time-to-hire, this metric looks at how long it takes to recruit an employee from job posting to offer letter. Workable‘s benchmark tool that uses anonymized data from millions of candidates processed in their system, broke down the time to hire by category and found that skilled IT/Technology workers have an average of 30 days-to-hire in Canada and the US whereas Logistics/Supply Chain professionals are usually hired in an average of 7 days. By keeping your process shorter than the average, you increase your odds of signing your choice candidate before they are presented with competing offers.
To improve this KPI, companies need to actively measure each stage of the process and understand where their average time-to-hire is relative to the industry. Once this is completed, devise a strategy that tackles areas of improvement while ensuring each step of your process remains both effective and efficient.
Cost Per Hire
Another critical indicator is how much money it’s costing the company per new employee acquisition. A GGFL report found that in 2017, a salary of $55,300 cost an employer $2,564.10 to recruit. As you climb the corporate ladder, that cost continues to rise and getting it wrong can quickly add thousands of dollars to the price of bringing in a new staff member.
When it comes to addressing this KPI, the best approach is to analyze how much you are spending, on average, for each new hire. Next, you will want to take a multi-pronged approach to ensure that you maintain a steady stream of potential candidates in your pipeline.
Begin by refining your corporate brand to attract interest across the industry and differentiate yourself from your competitors. You can read our latest piece on employer branding here. Next, create an employee referral program to develop your pipeline and reduce candidate search costs. Not to mention, it engages employees in expanding the team. Following this and depending upon the size of your HR team, also consider outsourcing the role to a recruiting professional who can leverage additional resources to find the right candidate. Finally, use an ATS or Application Tracking System to speed up candidate sorting time and reduce the upfront staff resources involved.
Qualified Candidates Metrics
This indicator looks at the number of qualified candidates who initially make it past the screening stage versus the total number of applications received for a specific role. Assessing this metric provides insight into the effectiveness of your job description, posting location, and candidate targeting. If the correlation between applications and qualified candidates appears to be low, it’s likely your search criteria is too broad or you’re looking for candidates in the wrong places.
To address this indicator, you may want to run some posting tests in a few different mediums. LinkedIn and Indeed are ubiquitous, but a well-regarded industry publication may bring you more desirable applicants. To gain better insight, ensure you tag every application with the platform the candidate discovered your posting from.This will reveal trends regarding where the best candidates are coming from and where you should be posting your roles.
New Hire Performance
When a new employee is brought on board, it’s essential that you continue your tracking processes. How well are they fitting in? Are they performing well in the role? Are you considering them for internal advancement? Have they already quit? At different intervals, each of these questions helps to gauge the success of a given employee. Comparing this data to how the person initially connected with your company can better refine your Talent Acquisition Strategy.
Offer Acceptance Rate
Keeping track of how many employment offers are being accepted is a critical metric in reviewing and refining your talent acquisition strategy. If candidates are making it through the interview stages yet a sizable number are turning down the offer, you have a problem. Of course, some will receive a reasonable counteroffer from a current employer, and a few may decide they aren’t up for the responsibility at the last moment. However, when you get to the offer stage, you want your prospective candidates to be excited by the possibility of joining your team and rising to the challenges.
To address this key indicator, you want to do your best to track the reasons they provide for turning down the employment offer. While you may not receive answers that are 100 percent truthful, they can point you in the right direction. If money or benefits are cited as the reason, you need to conduct an industry audit to understand if you’re low-balling your offers. Not only will this push prospects to competitors, but it may hurt your employer brand in the market and dissuade future potential applicants from ever applying.
A key performance indicator that often gets forgotten when assessing your Talent Acquisition Strategy is how happy the candidates are after accepting the offer and have started to work for your company. Not only will this metric help you understand if your recruitment process is up to par, but it will also tell you how well your onboarding and internal culture is working for your team.
While this metric can be gathered through employee performance reviews, the better method is usually through electronic surveys. These can be conducted anonymously or with assurances that feedback will not be shared with the employee’s manager. By regularly keeping track of your employees’ satisfaction at work, you can better understand your turnover rate, explain a high interview cancellation rate, or even project when you may need to ramp up recruitment throughout the year. It can also provide you with some critical insights to help you create a better culture, reform your employer brand, and retain your top talent.
At LRO Staffing, we work with some of Canada’s top employers to develop and define their Talent Acquisition Strategy and put the processes in place to measure these key performance indicators. If your company could benefit from our expertise, we’re here to help.